2002 News Releases

Dallas Fed Research
Publication Goes Electronic

DALLAS—The
Federal Reserve Bank of Dallas will issue the first article of
its all-electronic Economic and Financial Policy Review
this week

The online publication
supersedes the Bankâ??s Economic and Financial Review, a
print publication. The new Review, whose name was changed
to emphasize the policy nature of the publication, will contain
articles centered specifically on issues in contemporary economic
and financial policy, based on solid research and written at a
level accessible to a nontechnical audience.

Economic and Financial
Policy Reviewâ??s premier article, "Alternative Monetary
Constitutions and the Quest for Price Stability," examines
the various means through which governments and central banks
have sought to guarantee long-run price stability. Authors Finn
Kydland and Mark Wynne argue that monetary regimes or standards
can all be viewed as more or less successful attempts to overcome
the well-known time-consistency problem in monetary policy.

The classical gold standard,
which prevailed in the late 19th and early 20th centuries, can
be interpreted as a monetary policy rule that delivered long-run
price stability, the authors say. The fiat monetary standard adopted
by countries following the abandonment of gold allows greater
discretion on the part of monetary policymakers and has been characterized
by greater long-run price instability.

Countries have tried
through a variety of means to regain the benefits of price stability
that prevailed under the earlier gold standard by limiting the
scope for discretionary actions on the part of central bankers.
A close analogy exists between the gold standard and the currency
board arrangements proposed for many emerging market economies
in recent years.